Introduction India’s IT sector, often hailed as the backbone of the nation’s economic growth, is grappling with a critical issue: salaries that are disproportionately low compared to global and domestic market standards. Despite rigorous hiring processes and guaranteed job tenure, employees face stagnant wages that fail to keep pace with inflation, coupled with inadequate social security benefits. This article examines the problem, analyzes salary expectations across IT domains, and proposes actionable solutions to align compensation with India’s economic realities.
Problem Statement
- Stagnant Salaries vs. Rising Inflation While India’s inflation rate hovers around 6-7%, salary increments in IT multinationals rarely exceed 4-5%, eroding purchasing power. For instance, a software engineer earning ₹6 LPA in 2020 would need ~₹7.15 LPA in 2024 to maintain the same lifestyle a target most companies miss.
- Inadequate Social Security Benefits like EPF, gratuity, and health insurance remain minimal or poorly structured. Employees lack long-term financial safety nets, forcing them to rely on volatile external investments.
- Inefficient Hiring Practices Companies enforce exhaustive interview rounds (4-6 stages) and background checks, delaying onboarding and frustrating candidates. Ironically, this rigor contrasts with the industry’s reputation for mass hiring drives.
- Job Security Without Growth While layoffs are rare, employees face “golden handcuffs” secure jobs with stagnant wages and limited career progression. This demotivates top talent, pushing them toward startups or overseas opportunities.
Domain-Wise Salary Expectations & Challenges
Below is a snapshot of salaries in key IT domains (2024) and their misalignment with inflation:
Key Observations
- Salaries in niche domains (e.g., AI/ML) fare slightly better but still lag behind global peers.
- Non-monetary perks (e.g., WFH allowances) are inconsistent and rarely offset inflation.
Possible Solutions
To address these challenges, a multi-pronged approach is essential:
- Inflation-Linked Salary Adjustments
- Strengthen Social Security Frameworks
- Streamline Hiring Processes
- Upskilling for Salary Growth
- Policy Interventions
- Transparency in Career Pathways
Conclusion
Indian IT multinationals must recognize that “peanut salaries” and outdated benefits are unsustainable in a competitive global market. By aligning wages with inflation, revamping social security, and modernizing hiring practices, companies can retain talent and rebuild their employer brand. The sector’s future hinges on valuing human capital as much as operational margins a shift that will ensure long-term growth for both employees and organizations.
Call to Action Stakeholders employers, policymakers, and industry bodies must collaborate to implement these reforms. The time for incremental change is over; systemic action is overdue.
